Barclays Lowers Building Products & Homebuilding Industry To Neutral

Barclays lowered its U.S. Building Products & Homebuilding Industry View to Neutral.

Analyst Stephen Kim believed "investors should remain guarded in their approach to the group and approach the seasonal trade with some caution."

The report warned that a "Price-Less Recovery" looms and will "severely limit returns in the homebuilding stocks. In particular, we look for new home prices to be especially weak, posting declines" of 0 percent in FY 2015, -3 percent in FY 2016 and -5 percent in FY 2017.

Kim also lowered the housing starts forecast and doubted that "the dysfunction in the housing market will be resolved quickly enough to allow more than a 10 percent increase in sales volumes next year." The forecast for total starts was 1.1 million for FY 2015, 1.275 million for FY 2016 and 1.4 million for FY 2017.

The report concluded that "building products offer better opportunities, despite headwinds" and that price targets have been reduced for all homebuilders while D.R Horton, Inc. DHI remained the "top pick" in homebuilding.

In Building Products, the firm’s top pick remained Mohawk Industries, Inc. MHK.

D.R Horton, Inc. closed at $19.49, down 1.76 percent.

Mohawk Industries, Inc. closed at $124.82 Monday, down 2.58 percent.